Is American health care more expensive because its better…

… or because its less efficient?

Here’s one piece of evidence that American health care is better, but The Economist warns:

This is a good illustration of why it is so very, very difficult to do cross-country comparisons of the effectiveness of health care systems. They are plagued by definitional differences in statistics (is a baby born at five months gestation a neo-nate, who goes into your infant mortality statistics when he dies a few hours later, or a stillbirth, which does not?) They are heavily affected by differences in lifestyle, and ethnicity—almost no one thinks that the Japanese live so long because they have the world’s finest health care system. And, as this example illustrates, many variables are but ambiguous signals of quality. A country may have longer hospital visits and more acute care because the comparison country is letting its citizens die in the street; or because the comparison country is much better at treating disease, forestalling crises and long hospital stays; or because you are paying doctors and hospitals to treat crises and provide hospital beds, and they are responding to the signal.

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4 Responses to “Is American health care more expensive because its better…”


  1. 1 SWong March 7, 2007 at 6:39 pm

    I don’t disagree with any of the points listed there. This is an old problem that extends well beyond health care comparisons.

  2. 2 SWong March 8, 2007 at 12:24 am

    I have a related question: is there a refutation to the “tragedy of the commons” scenario?

  3. 3 Will March 8, 2007 at 5:53 am

    The tragedy of a the commons is a fact. You can ‘refute’ it by saying it doesn’t exist, I guess.

    You could argue that humans aren’t inherently self-orientated. But this seems like a steep hill to climb. At the basic level, physics determines our selfishness. Given that I’m here in this body, I can’t see what you see. I can’t care about what you care about in every instance.

    To be honest, in my cold-induced stupor, I’m not sure of the relevance of this in this context…

  4. 4 Will March 8, 2007 at 10:28 pm

    I’m still a little stuporish, but I’ll take someone arguing my point for me anytime. 🙂

    I think the drug example is more an example of negative externality. I’m not sure, in my stupor, if these always map to the tragedy.

    Typically, the commons problem is ivoked when the community pays for something, its free for individuals so they tend to over use it.


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